Adani Enterprises Ltd., which posted a 38% fall in quarterly profit, said India’s markets regulator has queried it about possible violations.

In the quarter ended March 31, the flagship of billionaire Gautam Adani empire received two so-called show-cause notices from the Securities and Exchange Board of India, or Sebi, about allegations of non-compliance of rules on stock exchange listing, related party transactions and validity of auditor certificates in the past, according to an exchange filing Thursday. No material impact is expected from these regulatory queries, it added.

Other firms in the ports-to-power conglomerate have also received such communication. Adani Ports & Special Economic Zone Ltd., Adani Power Ltd., Adani Wilmar Ltd., Adani Energy Solutions Ltd. and Adani Total Gas Ltd. informed bourses this week about Sebi’s show-cause notices but reiterated that this was unlikely to have an impact based on the legal advice they have got. Auditors for these firms, except Adani Total and Adani Wilmar, have issued a qualified opinion, implying that it might affect financial statements in the future.

The Sebi queries are part of a top court-led probe after short seller Hindenburg Research made wideranging allegations of corporate fraud and stock price manipulation on the Adani conglomerate in January 2023. Despite Adani’s denial, it triggered a stock rout that wiped out over $100 billion of group’s market value. 

The conclusion of the ongoing Sebi probe is set to draw a line under the short seller episode after the Supreme Court of India said earlier this year that no further investigations were needed. Sebi is also asking a clutch of global funds about allegations of improper disclosures and market manipulation in Adani Group stocks, Bloomberg News reported last month.

The Ahmedabad-based Adani Enterprises posted net income of 4.51 billion rupees ($54 million) for the quarter ended March 31, compared with 7.2 billion rupees a year ago, hurt by a one-time charge to provide for Covid-era airport dues. Shares fell 0.5% after the earnings were announced. 

‘Force Majeure’

Its unit Mumbai International Airport Ltd., or MIAL, recognized an exceptional expense of 6.27 billion rupees to make up for past payments. MIAL invoked the “force majeure provision” during the Covid-19 pandemic when a nationwide hard lockdown had grounded all air travel in India.

It sought a waiver of fees due to the Airports Authority of India, which led to arbitration proceedings. The company has now provided for a part of those dues, triggering this one-time expense. Revenue, meanwhile, climbed 0.8% to 291.8 billion rupees while total costs rose 2% to 283.1 billion rupees, the filing said.

The tepid earnings as well as the show-cause notices show that the ports-to-power conglomerate still has to navigate a few hurdles as it mounts ambitious plans to invest $100 billion in green energy transition and scale up other businesses.  

Adani Enterprises, known as the group’s incubator for new units that are later spun off, oversees a motley mix of businesses ranging from airports to data centers and green hydrogen to metals. Its also building a second airport on the city’s outskirts.

Revenue at the firm’s Integrated Resource Management unit, which mostly consists of coal trading, slipped 1.7% to 185.21 billion rupees in the March quarter. The airport business rose 27% to 21.56 billion rupees as air passenger traffic climbed 9%. Revenue at the new energy ecosystem, which includes solar, wind and green hydrogen business, tripled to 27.06 billion rupees. 

Copper Project

Adani Enterprises kickstarted the first unit of a $1.2 billion copper smelter at Mundra — the tycoon’s first foray into metals refining — in the end of March to tap rising demand for the metal amid an infrastructure boom in India.

It also shows that the tycoon is back to diversifying his conglomerate that was built on coal trading, into newer lines of business — a growth trajectory that was derailed after Hindenburg Research’s bombshell allegations.

Shares of Adani Enterprises rose 12.2% in the March quarter and about 58% in the past year but they haven’t touched its pre-Hindenburg levels yet. That’s true for most other group companies too.

While Adani Green Energy Ltd. is yet to announce its earnings, here’s a snapshot of how other Adani Group firms have done in this quarter: